Sanden CorporationTSE: 6444

Financial Results of 2nd Quarter （PDF：1,472KB）

Sep 18, 2024 at 12:12 AM UTC · Issued by Sanden Corporation

Financial Results for Q2 FY2024

September 6, 2024

Sanden Corporation

Financial Results for Q2 2024

Key points of Q2 financial results
Sales by Segment
Variance analysis from the previous year
Key Indicator Trends
Consolidated Balance Sheet
Status of Activities under１the６ Medium-Term Business Plan

１．Key points of Q2 financial results

Sep. 6, 2024 Sanden Corporation

Revenue ］

While global vehicle production in the second quarter was broadly in line with the previous year, demand in Europe, our main market, was lower than in the previous year.

1 Revenue increased by ¥6.7 billion year-on-year. Excluding the impact of foreign exchange rates, which was +¥8.5 billion, revenue decreased by 1.8 billion yen.

In China, sales remained strong, including for EV vehicles, and in Asia, sales to local OEMs grew, and sales continued to increase. In the Americas, sales decreased, particularly for the aftermarket, and in Europe, sales decreased excluding the impact of exchange rates due to an increase in imported EVs and a decrease in demand for trucks due to the economic slowdown.

Profit ］

Sales were sluggish, while raw material costs were on the rise, and we continued to negotiate prices to mitigate this impact. In Asia, we achieved productivity improvements and cost reductions by increasing the capacity utilization rate as sales increased. Operating profit increased by ¥1 billion year-on-year. Regarding the increase in logistics costs, the decrease in volume, and the deterioration in product

2 mix, in addition to cost reductions and SG&A and productivity improvements, there was also an impact from foreign exchange rates, and there was an improvement compared to the previous year. However, the increase in profit was reduced due to the allocation of profits to growth investments. Net income increased by 800 million yen, and a profit of 500 million yen was secured, compared with a loss in the previous year.

EBITDA was 4.7 billion yen, an increase of 2.7 billion yen from the previous year, mainly due to the increase in ordinary income.

Measures ］

3	Strengthened and implemented measures to respond to environmental changes that became evident
in the first quarter. Negotiated prices and reduced costs in response to rising fuel and raw material

	costs due to the continued depreciation of the yen. Reduced air and ocean freight costs in response to
	longer lead times for shipments to Europe due to the Red Sea crisis.

© 2024 SANDEN CORPORATION	3/19

１． Key points of Q2 financial results

Overview of Consolidated Financial Results

Sep. 6, 2024 Sanden Corporation

				FY2023	FY2024	Year-on-Year
	[Unit：¥100M]
	Jan - Jun 2023	Jan - Jun 2024	Difference	Rate of
						Change


Revenue			875	942	67	7.7％

		Automotive	869	934	65	7.5％
	Components


		Other	5	8	3	60.0%

Operating profit	△44	△34	10	－

Equity in net income of affiliates	25	26	1	6.5%

Exchange			15	22	7	52.7%

Ordinary profit	△10	14	24	－

Net Income Attributable	△3	5	8	－
to Owners of the Parent


EBITDA			19	47	27	140%

Exchange		US＄	¥135	¥152	¥17

	EUR	¥146	¥164	¥19

*Actual results are rounded off to the nearest 10 million yen. *Exchange rate: Market average rate

FY2023	Period-
over-Period

Jul - Dec 2023
Difference


918	24

911	23

7	1

△66	32

19	7

△18	41

△74	88

△30	35

△42	89

¥146	¥6

¥158	¥6

© 2024 SANDEN CORPORATION	4/19

２． Sales by Segment: by Region

Sep. 6, 2024 Sanden Corporation

Sales: ¥93.4 B +¥6.5 B (+7% year-on-year)

（Exchange rate impact was +85）

※Automotive segment only. Excludes other businesses.

Regional Composition

Japan

Asia		7%
19%		Europe
	38%

22%

China 14%

Americas

	Europe Area			China/Asia Area				Japan			Americas
A decline in demand for EVs		Growth for local OEMs			Growth in OEM and		Increase in electric vehicles
[Unit：¥100M]	Weak truck market			Growth in China for EVs			construction machinery		Decrease in aftermarket and for
													Latin America
		+6%				+10%

						385
400		+20	352		400	+35		400					400
				349	25	Exchange
332
	40	Exchange				Rate
						Impact
300				Rate	300			300					300

			Impact

200					200		360		200		+1%			200	+6%
			312									119	+7	127


100					100				100	69	+1	70		100		14 Exchange
										Rate
										4 Exchange
															113	Impact
												66	Rate

0					0				0				Impact	0
												Jan - Jun
Jan - Jun		Jan - Jun			Jan - Jun	Jan - Jun			Jan - Jun	Jan - Jun	Jan - Jun
2023		2024			2023	2024			2023		2024		2023		2024
			© 2024 SANDEN CORPORATION				5/19

２． Sales by Segment: by Product

Sep. 6, 2024 Sanden Corporation

Sales: ¥93.4 B +¥6.5 B (+7% year-on-year)

（Exchange rate impact was +85）

※Automotive segment only. Excludes other businesses.

EC		ITMS

	ECH and new energy vehicles
EU Truck Market Slowing Down
	are driving sales growth.

Product Composition

						EC
			MC	22%

51%	2% ITMS

					25%
						HVAC

		HVAC		MC

	Increased demand in China and		Increase in sales of PX
		other parts of Asia				compressors

[Unit：¥100M]										+9.3%

500			500			500			500	433	+41	474
							＋11%
400			400			400		400

300	▲1.8%	300			300	+24		300
					232
209	▲3	206					208
	+16%
200			200		200			200
100			100	+3	22	100			100
				19
0		Jan -Jun	0			0			0	Jan -Jun
Jan -Jun		Jan -Jun	Jan -Jun		Jan -Jun	Jan -Jun			Jan -Jun
2023		2024		2023	2024		2023	2024		2023		2024
		© 2024 SANDEN CORPORATION			6/19

３．Variance analysis from the previous year: EBITDA

Sep. 6, 2024 Sanden Corporation

Comparison with the first half of 2023

	2023	2024	Difference

Sales	875	942	+67

EBITDA	19	47	+28

Significant improvement over the previous year

Profitability has improved over the previous year as a result of cost reductions, productivity improvements, and reductions in SG&A expenses
On the other hand, there was an increase in logistics costs due to the Red Sea crisis and air freight (▲0.3%)
Growth investments for the future are also increasing.

[Unit：¥100M]

+30

30					+4
19				+2	+3
	+0	+1
20


10	▲2		▲1

0

▲14

R&D▲14

© 2024 SANDEN CORPORATION	7/19

［Reference］ New Mid-Term Business Plan "SHIFT2028"

Sep. 6, 2024 Sanden Corporation

From a component supplier to a "Full Solution System Supplier".

Grow as a leading company in integrated thermal management systems based on our established business foundation.

			Business Reconstruction
			（2020-2023）
			Achievements
Management
Reconstruction of earning
	Policy	power
			Ranked the 2nd in compressors.
	Basic	Component Supplier
	Strategy


	Growth	Compressors for ICEs
	Compressors for EVs
	Area

Investment Actions for EV shift

for Growth (Strengthening R&D and production

（Synergy） plants)

Regional	Ranked the 2nd in Europe
Policy	and the 1st in China

Mid-Term Business Plan SHIFT2028

（2024-2028）

Mid-Term Business Plan Targets

A leading company in Integrated Thermal Management System

Full Solution System Supplier

Compressors for EVs

+ Integrated Thermal Management System

Investment in R&D and production for EV shift and ITMS

V2X and smart system

Further expansion in European and Chinese markets

#1 in the EV market in Americas

© 2024 SANDEN CORPORATION	8/19

［Reference］ Overview of New Mid-Term Business Plan （1/2）	Sanden Corporation
	Sep. 6, 2024

Focused on the NEV market and with electric compressors at the core, we provide integrated thermal

management system solutions that are competitive, adaptable and close to our customers.

Revitalization Period （2020-2023）		Mid-Term Business Plan （2024-2028）

Reconstruction of Earning Power
Providing integrated thermal management system solutions that are both competitive and adaptable
		Regional Strategy

1 Extensive customer access as an independent manufacturer.

Strengthening our presence in the Chinese

market through synergies with our joint venture partners in China.
Advanced Technology Development of Integrated Thermal Management Systems

Technology and trust built up through the

4 production of 400 million units.

◼ Develop region-specific marketing by leveraging the strengths of an independent manufacturer.

◼ In addition to our existing joint venture partners in China and through synergies with Hisense, we will build a foundation of competitive advantage in China, the world's largest automotive market, and support Chinese OEMs in their growth and global OEMs in their entry into the Chinese market.

NEV Enhancement of the resources for the Integrated Thermal Management System

Realization of a high value-added business model through evolution from a component supplier to an integrated thermal management supplier
Increase flexibility by promoting the platforming of products

Future growth areas through technology synergies with Hisense

V2X, Smart system

Enhancement of global production system.

Optimization of mature product production and
4-region electric compressor production structure Strengthen cost competitiveness through
procurement synergies with Hisense

Thorough utilization of existing production system and supply chain

ICE ◼ By using optimized existing assets, reduce investment and secure stable revenue.

Strategic partnerships with suppliers

Sustainability

Reinforcement ◼ Biodiversity initiatives as well as carbon neutrality

Foundation ◼ Strengthening disclosure of non-financial information as part of global companies' social responsibility, such as CSRD

© 2024 SANDEN CORPORATION	9/19

［参考］新中期計画の概要（2/2）	Sep. 6, 2024

	Sanden Corporation

2028 Target: ¥300 Billion in sales and ¥9 Billion in ordinary profit

	【Europe】 Expand market share by
	1.strengthening sales of NEV-related
	products to global OEMs in Europe.
Regional	Market	¥200B	¥500B
Size	8%	16%

Strategy

20232028

2.【China】 Capitalize on the rapid growth of China's thermal management markets by maximizingCAGRsynergies with Hisense

Market	+68%	¥660B
Size

¥50B

20232028

3. 【Americas】 Accelerate expansion of NEV products in the Americas.

NEV product	¥40B
sales in

Americas

¥100M

20232028

Strategy Themes

4. 【Development/Product】 Leverage the strengths of an independent manufacturer to serve multiple customers.

Achieve flexibility in meeting customer needs through platforming. Semi-customized product development

20232028

# of supported	111	165
models

【SCM・sustainability】 Optimize global production layout and
5. supply chain, and achieve sustainability compliance
Production	3 Regions (current) Expand to 5	Regions
•	China	•	China	•	Japan
plants of
systems	•	Japan	•	Europe	(Enhancement）
•	Asia	•	Americas •	Asia

（HVAC/ITMS）

Reinforcement

Foundation

6. 【Human Resources/

Digitalization】

Reinforce human resource development and improve the efficiency of organizational

operations.

Investment

Investment in R&D
Investment in IT

Human Resource Development/

Assessment

Acquisition of key personnel
Retention, selection, and development of human resources
Systematic management development
Optimization of incentive system

Project Management

Set up CFT(Cross-functional team) and put the team on projects.
Systematic management of project progress and profitability

© 2024 SANDEN CORPORATION	10/19